The electric-vehicle maker’s (ticker: TSLA ) stock chart looks like a mountain range, with many ups and downs. After recently taking shares close to $280, the stock appears to be coming down from the other side of the highs.
“The immediate concern is to see a stockpile that can be broken down. [a] Down the line,” said Captesis founder and market technician Frank Cappelli. “Similar trend line breaks have led to rapid sideways moves in 2023 for the past three periods.
Tesla stock went from $220 to about $280 in a heartbeat. But now shares are threatening to break below $260. According to Cappelli Charts, $240 is in play.
The reason for the recent weakness does not seem to be related to the company. “The market is in a correction phase,” said John Rock, senior managing director and head of technical strategy at 22V Research. “Tesla is not immune.”
A key question for investors is how far the stock can fall. Beyond Cappeleri’s suggested $240, “key support for Tesla is near $218,” said Fairlead Strategies analyst Will Tamplin. The recent rally in mid-August is the starting point and another price point for investors to watch.
None of the three comments represents a call on Tesla’s business prospects. Like other technical analysts, stock charts take lessons from past trading to help investors and traders understand where things are going in the short to medium term.
The approach is very suitable for Tesla stock. Stocks tend to move up and down quickly as too much good or bad news is reflected in the price.
It happens a lot in Tesla stock because investors in the company, and analysts, tend to be a little extreme. Kathy Wood of ARK Invest expects Tesla to earn $2,000 a share in the coming years. GLJ Research analyst Gordon Johnson believes Tesla is worth about $24 per share.
The 1,900-plus spread is about 8 times the stock’s current price of $257 per share, a gap that represents more than $6 trillion in market capitalization. There aren’t many stock investors as controversial as Tesla.
Of course, not everyone is trying to make a profit trading the stocks they hold in their portfolio. Some stocks gain value over time, leaving them alone in search of points.
Tesla stock fell 2% in Thursday’s trading. of
S&P 500
And
Nasdaq Composite
They are 0.7% and 1% discount respectively.
Write to Al Root at [email protected]
.
